Jalen Enterprises reports the following information in its 1996 financial report: 12/31/96 12/31/95 Plant equipment $1,000,000 $750,000 Less: Accumulated depreciation 590,000 490,000 $ 410,000 $260,000 ADDITIONAL INFORMATION: 1. Jalen Enterprises began operations on January 1, 1994, and the entire Plant Equipment bal¬ ance reported on December 31, 1995, was purchased for cash on the first day of opera¬ tions. This equipment had an estimated salvage value of $50,000 and an estimated useful life of four years. The company neither bought nor sold any plant equipment during 1994 and 1995. 2. On January 1, 1996, Jalen Enterprises sold for cash some plant equipment that originally cost $200,000, at a book gain of $25,000. When the equipment was acquired on January 1, Chapter 9 Long-Lived Assets 467 P9—1 1 (Selling and trading in fixed assets) P9-12 (Natural resources: different methods of cost allocation depend on the nature ofthe asset) 1994,it had no estimated salvage value. The original estimates for the salvage value and the useful life are still accurate for the remaining equipment. 3. The company purchased additional plant equipment on January 1, 1996, for cash. This equipment is expected to be scrapped after five years and has an estimated salvage value of $30,000. REQUIRED:

a. Prepare the entry to record the plant equipment acquired on January 1, 1994.

b. What method does the company use to depreciate plant equipment?

c. Prepare the entry to record the depreciation expense for the year ended December 31, 1994.

d. Prepare the entry to record the depreciation expense for the year ended December 31, 1995.

e. Prepare the entry to record the sale of the plant equipment on January 1, 1996.

f. Prepare the entry to record the purchase of plant equipment on January 1, 1996. g. Prepare the entry to record the depreciation expense for the year ended December 31, 1996